(1) Accounting entries shall be identified with a standard Chart of Accounts consisting of:
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(a) Fund Code, as per schedule II, for all transactions;
(b) Function Code, as per Schedule III, for all transactions involving budget codes
(c) Account Code, as per sub-rule (2) below;
(2) The account code shall consist of major code, minor code, sub-minor code and detail code. The major code, minor code, and sub-minor code shall be as given in the following Schedules
(a) Schedule IVA, in respect of income account heads;
(b) Schedule IVB, in respect of expense account heads;
(c) Schedule IVC, in respect of liability account heads;
(d) Schedule IVD, in respect of asset account heads.
and detail code shall as prescribed in sub rule (3) below.
(3) The detail code shall be assigned by the Municipality for detailed classification of transactions according to its needs.
However the Government may prescribe mandatory detail codes wherever necessary.
(4) The detail code shall be of two digits, and the digits ‘00’ shall be used where the classification provided in the Chart of Accounts at the sub-minor code level is found to be sufficient for the Municipality’s requirements.
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Provided, however, that in the case of bank accounts, three-digit detail codes shall be used to indicate the bank account.
(5) All transactions shall be accounted in the books of account, using six or seven digit account codes as the case may be.
(6) A general ledger account code may be designated as a ‘Control account’ in which case a separate sub-ledger shall be maintained for each such account, consisting of individual accounts including personal accounts. General ledger and sub ledger shall be in Form No KMF 5.
6. Source of Financing: Municipalities may also maintain ‘Source of Financing’ codes to track transactions pertaining to different types of source of financing such as the municipality’s own source, grants, loans etc. The source of financing codes shall be as per Schedule V.